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Why zero-fee super is not always worth it

Why zero-fee super is not always worth it

Some industry super funds are offering passive index options with investment fees as low as zero per cent. Should you jump on the bandwagon?

Fee-conscious superannuation members could be tempted to choose passive, indexed options over the default balanced portfolio. After all, fees can have a drastic impact on members' retirement outcomes. A typical worker will retire with $100,000 less if their fees increase by just 0.5 per cent a year, according to the Productivity Commission, which concluded higher fees are clearly associated with lower net returns over the long term.

But returns rather than costs are what investors should be focused on, say research houses including Chant West, SuperRatings and Rice Warner.

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Misa Han
Misa HanReporterMisa Han writes on news and business from our Sydney newsroom. Connect with Misa on Twitter. Email Misa at misa.han@afr.com.au

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Original URL: https://www.afr.com/wealth/personal-finance/why-zero-fee-super-is-not-always-worth-it-20190527-p51rjj